Nexity will cut 502 positions to deal with the deep construction crisis, the leading French real estate developer announced on Thursday.
“We have confirmed to our social partners that the information-consultation process prior to the deployment of a job protection plan will be initiated and it will concern the elimination of 502 positions,” the group’s deputy general director declared to the press. , Jean-Claude Bassien.
“We have continued our actions in terms of reducing our operating cost base,” he also underlined.
This social plan was announced at the end of February, without the group specifying how many positions would be affected.
“There will be no departure under the PSE before the fall, and rather at the end of October,” specified Jean-Claude Bassien, taking into account legal procedures.
The cost of this plan for the group is estimated at around 50 million euros, indicated in a Nexity press release, which plans to derive 36 million euros in savings from 2025, then 45 million per year.
It is the workforce in the Promotion-construction division that is concerned, which will have decreased by 27% compared to 2022. That year, Nexity employed some 2,800 people in its promotion branch.
Nearly 400 people have already left the group even before the implementation of the social plan, denounced to AFP the CFDT union representative for this branch, Emmanuel Brie.
“We are going to fight so that there is as much mobility and voluntary departures as possible,” he declared.
The leading French real estate developer employed 8,185 people at the end of 2023, or around 300 fewer than at the end of 2022, the group having already implemented a non-replacement of departures to adapt to the economic situation.
Since then, some 3,100 additional employees have left the group during the sale of the subsidiary Nexity Services (now Evoriel) to the Bridgepoint investment fund.
The cash obtained from this sale (400 million euros) will be used to reduce debt and will allow Nexity to implement its restructuring “without delay”.
“Bottom of cycle”
This social plan is the most important announced this year by a developer, the real estate subsidiary of Bouygues having announced 225 upcoming job cuts, while Vinci Immobilier has announced a social plan which is not currently quantified.
Like its competitors, Nexity is caught between rising construction costs, caused by material prices and stricter environmental regulations, and the collapse in demand, caused by difficulties in accessing credit and the end of progressive tax incentive schemes.
The French Building Federation is counting on 90,000 job losses in 2024 across the sector.
In the first quarter, Nexity’s housing reservations fell by 29% in number and 22% in value compared to the first quarter of 2023, indicates the group, specifying however that retail sales (to individuals) were no longer falling.
“We are clearly at the bottom of the cycle,” said Jean-Claude Bassien.
The group’s turnover increased by 14% to 770 million euros.
The promoter hopes to move forward, noting some positive indicators for the future, notably the slight decline in credit rates, or the fact that reservations are picking up, due to the group’s efforts on its sales prices.
But the structural housing crisis is not about to end, CEO Vronique Bédague warned in Le Figaro.
“I don’t see the situation improving quickly. Each interest rate cut will give us some breathing space, but it will take time. And there will always be a delay between the announcement of a reduction and the moment when banks start lending again,” she said.
The group’s restructuring plan also involves increased decentralization and savings on “general and real estate costs”, which, together with the reduction in payroll, should reduce its costs by 95 million euros per year.
To alleviate the crisis in real estate development, Nexity has embarked on diversification, launching into solar energy and savings products.
It also intends to accelerate its development in the transformation of spaces already built to anticipate the imperatives of zero net artificialization.